Asian stocks rose today as risk appetite continued to recover from last week's Brexit shock, but the pound came under renewed pressure after the Bank of England's governor hinted at an interest rate cut ahead.

The index has recovered nearly all the losses suffered last Friday when global markets plunged in response to Britain's decision to leave the European Union.

It has gained close to 3.5 per cent since Friday's close on a combination of short-covering and relief that Brexit did not spark contagion in the global financial system like that which engulfed markets during the 2008-09 crisis.

Japan's Nikkei rose 0.6 per cent after the yen surrendered more of the territory gained during the flight to quality seen earlier in the week. It is on track for a 4.8 per cent gain for the week.

South Korea's Kospi extended gains to 0.8 per cent, set to end the week 3.2 per cent higher.

China's CSI 300 and Shanghai Composite indexes advanced 0.4 per cent, and looked set for weekly gains of 2.9 per cent and 3 per cent respectively, after data showed growth in China's services sector accelerated in June, while the manufacturing sector stalled.

"Share markets rebounded over the past week as worries about Brexit leading to global financial and economic chaos faded somewhat," Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

"The week ahead will no doubt see bouts of Brexit-related nervousness but it may continue to settle down in the absence of any new developments in Europe."

The Dow Jones industrial average climbed 1.3 per cent on Thursday, posting its third straight day of gains and erasing a bulk of its losses after Brexit.

Some of the overnight gains on Wall Street were attributed to hopes for more monetary easing after BOE governor Mark Carney said on Thursday the central bank would probably need to pump more stimulus into Britain`s economy over the summer in wake of the Brexit shock.

A number of Asian central banks, including those in Japan and China, are also expected to ease policy further later this year, while a number of Asian governments have ramped up fiscal stimulus.

Carney's comments forced the pound to head south on Thursday and cut short the currency's recovery from a 31-year low on Monday.

Sterling last traded at $1.3346 after nearly touching $1.35 on Thursday. The pound, which lost almost 8 per cent soon after the Brexit vote, has declined a further 2.6 per cent since. It sank to $1.3122 on Monday, its lowest since 1985.

"Carney has always been nervous about how Brexit would impact the UK economy and now that it is a reality, he is preparing for the worst, agrees with the doom and gloom scenario and wants to assure the market that the BoE will be proactive," wrote Kathy Lien, managing director of FX strategy at BK Asset Management.

Sterling's slide added mild pressure on the euro, which was steady at $1.1104 after slipping overnight from $1.1155, its highest in six days. It's poised to end the week flat.

The dollar pulled back slightly against the safe-haven yen, but retained most of this week's gains. The greenback, which fell to 99.00 yen in the initial phases of the Brexit shock, was last trading at 102.88 yen, on track for a gain of 0.7 per cent for the week.